Gap on the Bargain Rack

While many retailers are reeling from big drops in store traffic, the Gap's strong showing in July suggests the stock can rise further.

Gap's (ticker: GPS) July same-store sales -- which measure stores open for at least a year -- rose 2%, far exceeding analyst expectations of a 0.1% increase, according to Thomson Reuters. The apparel retailer also offered an upbeat outlook for the recently ended second quarter, predicting profit per share of 68 cents to 69 cents, beating the 66 cents expected by Wall Street.